Alberta will have ‘a lot more say’ on energy deals: finance minister

Nexen, Progress ruling pleases Alberta, but province seeks 'more say'

TORONTO — The Alberta government appears to be reserving final judgment on the federal government’s new investment rules, which bar state-owned enterprises from taking controlling stakes in oil sands companies, unless in exceptional circumstances.

“The story for that one is yet to be written, because we have to wait and see what impact it is going to have,” Doug Horner, finance minister of Alberta, said Monday on the sidelines of an oil and gas investment conference here.

We will see how it plays out in the future for some of the other groups that are involved in the oil sands

“We are certainly pleased the federal govt [approved] the Nexen and Progress opportunities, but we will see how it plays out in the future for some of the other groups that are involved in the oil sands.”

Mr. Horner also said it is unclear how Industry Canada’s decisions will impact joint ventures and minority interests.

“There is tremendous amount of investments required, some US$220-billion in 25 years. We believe that we [need] foreign investment coming from all sectors, in order for us to fully realise the potential of our resources.”

However, the restrictions on SOEs may open the door to some investors who felt they were not in a competitive position before, the minister said.

While Ottawa believes that SOE control in the oil sands is an issue, Alberta will work with the federal government to ensure the province has “a lot more say in the near term” on such deals, he said.

“Given that Alberta owns these resources we should certainly have some input into things moving forward, and those discussions are ongoing right now,” said Mr. Horner, adding that he would also like more clarity on the “exceptional circumstances” that would allow SOEs to gain control of oil sands companies, and the guarantees given by CNOOC Ltd. to secure the Nexen Inc. bid.

Tim McMillan, Saskatchewan’s Minister Responsible for Energy and Resources, was also circumspect about the implications on the province’s nascent oil sands industry.

“Longer term we will have to wait and see, what rules are laid out. There is going to be more analysis as to exactly how it is going to effect,” said Mr. McMillan, adding that Premier Brad Wall was going to comment on the investment rules on Tuesday.

Meanwhile, Nexen’s chief executive said the $15.1-billion acquisition of the Calgary-based oil producer by CNOOC was not yet wrapped up despite the Canadian government’s approval last week.

“We are nowhere near done, so it’s too early for that,” CEO Kevin Reinhart told Reuters as he left a Calgary business conference on growing economic ties between Canada and Asia.

The deal also needs approval from the Committee on Foreign Investment in the United States before it can close. In late November, the companies withdrew and resubmitted an application for approval by CFIUS.